As a seasoned analyst with over two decades of experience in the financial markets, I’ve seen my fair share of market fluctuations and trends. The recent downturn in Ethereum (ETH) is not an unfamiliar sight, but the persistence of this bearish trend is certainly concerning.
In the face of increased cryptocurrency market turbulence, Ethereum (ETH) saw a drop of over 4% within the last 24 hours, trading at approximately $2,532 during early trading on Wednesday, August 28, in New York. This well-established altcoin, valued at around $303 billion when fully diluted and with an average daily trading volume of roughly $22 billion, has experienced a lackluster bullish trend over the past six months.
Although numerous locations have previously authorized Exchange-Traded Funds (ETFs) based on Ether in the U.S. and other regions, the value of Ethereum has persistently declined over the last period.
Lately, a daily crossover between the 50 and 200 Moving Averages (MAs) indicates a potentially pessimistic mid-term outlook for the altcoin market. Additionally, Bitcoin‘s dominance has been strengthening against altcoins, as suggested by the downtrend in the ETH/BTC pair, which follows a bearish trend.
Ethereum Whales Continue to Flee the Market
Previously reported by Coinspeaker, the recent green light for multiple Spot Ethereum ETFs in the U.S. has gradually morphed into a “sell-the-news” situation. As per the most recent market figures, US Spot Ethereum ETFs have seen nine straight weeks of money flowing in.
Since their official debut, U.S. Ether ETFs, spearheaded by Grayscale’s ETHE, have experienced a total withdrawal of approximately $481 million in assets. On Tuesday alone, these U.S. Ether ETFs reported a net cash outflow amounting to roughly $3.45 million.
Currently, significant Ethereum holdings are being offloaded by top whales across various centralized exchanges, with Binance leading the trend. For example, the Ethereum Foundation, owning approximately 275,000 ETH valued at over $677 million, has transferred around 35,000 ETH, worth more than $93 million, to Kraken.
Over the past month, I’ve observed that Jump Trading has offloaded approximately 88,900 Ethereum, valued at around $276 million, across various exchanges, with Binance and OKX leading the charge. Notably, since July 9th, an ICO-linked wallet has transferred over 48,000 Ethereum, equivalent to over $154 million, into OKX.
In recent weeks, some major Ethereum investors known for their tenacity, or “diamond hand” status, have transferred more than 25,000 Ethers to centralized exchanges like Kraken.
$ETH has painfully plunged twice in the past month (🔻23.5%).
In this thread, we’ve underscored four significant factors potentially causing the recent sale of approximately 197,800 Ether (valued at around $599 million), which could be contributing to the current downward trend.
• The Ethereum Foundation: – sold 35.4K $ETH ($95M) – still holds 275K $ETH ($677M)
• Jump…
— Spot On Chain (@spotonchain) August 28, 2024
Midterm Expectations
Given the decreased interest in Ether from institutional investors in the recent past, even with a dovish stance from Fed Chair Jerome Powell, some analysts predict that the price of ETH will likely decrease in September. As per experienced trader Peter Brandt’s analysis, for ETH prices to invalidate further declines towards $2K, it must consistently close above its current support/resistance level near $2,814.
In a trade, I always seek a clearly marked stop loss level, a point beyond which I acknowledge that I made an error and exit the position to minimize losses. In this case, $ETH trade can be considered well-defined on the short side, as above 2830 or so, the trade becomes invalid.
— Peter Brandt (@PeterLBrandt) August 27, 2024
To put it simply, for Ethereum’s price to be considered less bearish, it needs to rise again and hold the value of its weekly 50 Moving Average as a foundation. Additionally, the Relative Strength Index (RSI) should increase above 50 points to suggest that sellers are not dominating the market excessively in the upcoming weeks.
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2024-08-28 15:30